Given the recent news about potential cheese contamination and various recalls, I thought it would be useful to understand just what the underlying legal issues and processes are in these types of situations. Toward that end, I spoke with Ken Odza, a products liablity attorney and partner with the firm Stoel Rives in Seattle, Washington. Mr. Odza is an expert in the field of product liability and has litigated numerous cases in the area of foodborne illness, insurance recovery and other commercial and business matters. His firm also writes the blog Food Liability Law, where they recently posted a Listeria Recall Toolkit discussing some useful strategies a business might emply in the event of a listeria-related recall.

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What happens in a typical food product recall situation?

Currently, the FDA does not have mandatory recall authority. So all recalls have to be voluntarily initiated by a food seller. In 99% of the cases where a product needs to be recalled (for example, when it has tested positive for something like listeria) the company, not the government, recalls the product.

The law defines certain levels of recall - Class I, II or III. A listeria problem in a ready to eat product such as cheese is typically a Class I recall because it's viewed as such a dangerous pathogen. A Class I recall comes with a high level of publicity.

In the Estrella case there has been a seizure order issued by a federal judge. What is a seizure order and how does that fit into the whole process?

If a producer refuses to recall the products, the next step is usually that the FDA will work the publicity angle. And so you see that the FDA issued a press release about the Estrellas in September. Next, if a company still doesn’t cooperate, the FDA may take the rare step of requesting involvement of the US Attorney's office to obtain a seizure order by the federal court. A seizure order like the one issued in the Estrella case is a really extreme measure. The number of seizures the FDA does in a year is really small.

If your products are the subject of a seizure order, you have the right to file a claim for the seized goods in order to avoid their disposition by the government. To prevail, you'd have to overcome the FDA's showing that the products are adulterated - which means you'd have to prove somehow that the FDA tests were wrong, or made up, or show some problem with the testing itself. The reality is that prevailing against the FDA is very challenging, to say the least. And, if you lose, you will be ordered to pay the government's fees, costs of storage and other costs.

[note: for general background on the Estrella Family Creamery case, see here. For legal specifics, download the Estrella seizure order here and/or see FDA seizure procedures manual here]

What other penalties are possible?

Even more significant than seizure of your product and a shut-down of your business is criminal liability. Under the Food, Drug and Cosmetic Act, it’s a crime to sell adulterated food. It’s a crime even if you’re not doing it intentionally, and even worse of a crime if you are doing it intentionally. The FDA has been pivoting toward enforcement. In the event of an FDA seizure, criminal defense counsel should also be retained.

How does a recall typically play out over time?

The economic cost of a recall alone can overwhelm a food business. Here's a hypothetical example: say you are selling cheese, from a certain batch made on a certain day, that tests positive for listeria. But some cheese that you made later is not positive for listeria. So you tell FDA - we’re only recalling the positive batch. The FDA will say – how do you know the other batches aren’t contaminated? You say - because my results are negative for listeria in other batches. The FDA will say - that's not good enough. They’re going to want to know what kind of environmental swabs have been done of the facility, where, when, etc. If you can’t show that the environment itself was clean between your production runs, you may have to recall every product you’ve ever manufactured out of that plant. Imagine the costs, even if no one had ever gotten sick.

And then, as soon as a retailer hears about a problem with your product, they’re going to pull your product no matter what, and not wait for test results. And they're going to charge that cost back to you. So you're not only facing your own recall costs, but your customers' costs as well. During the peanut recall of 2009, for example, the company (Peanut Corporation of America) couldn’t afford to recall their own products, and as a result they went bankrupt. Recall costs can be overwhelming.

Do you think the FDA is specifically focused on the artisan cheese industry right now?

More and more, I see the FDA moving toward a risk-based approach. They don’t have the resources to have inspectors everywhere all the time. So I think they’re looking at the cheese community and saying - there's a lot of folks out there doing this, it's an expanding sector. These new producers may not have the resources to do sophisticated food safety prevention in the same way that larger companies do, so maybe we ought to pay more attention to this industry.

The food-borne illness that concerns the FDA more than any other is is Listeriosis. Listeriosis, caused by the bacteria listeria monocytogenes, kills a higher percentage of its victims than any other food-borne illness. Listeria is often found in deli products such as cheese, processed meats, hot dogs. That’s probably another reason why the FDA is focusing on these recent cheese-based listeria outbreaks so closely.